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Marginal revenue product


The addition to total revenue from a small increase in any factor input, per unit of the increase. This takes account of both the effect of the extra input in raising the quantity produced, and the effect of an increase in the quantity sold on the price that can be charged for it. Marginal revenue product equals marginal product multiplied by marginal revenue per unit of additional output sold.


Reference: Oxford Press Dictonary of Economics, 5th edt.